Higher insurance rates may cause smokers to flee Obamacare coverage

Oct. 28, 2013

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Gannett Wisconsin Media Investigative Team

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ACA and smokers

Two financial effects from the health care law will affect smokers and other tobacco users. First, these people are essentially the only ones who can be charged more for insurance based on their lifestyle. Second, the law requires that some strategies for quitting, including medication or counseling, be covered by state Medicaid programs starting Jan. 1. Plans offered on the insurance exchange also must cover the smoking cessation options approved by the U.S. Public Health Service.

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Ellen Vanderboom can’t believe that people in Wisconsin are willing to pay nearly $8 for a pack of cigarettes.

She also knows the increasing expense of buying cigarettes — and treating the health problems that follow — won’t get everyone to stop smoking.

For the past seven years, Vanderboom has helped people quit smoking as a clinical nurse specialist for Marshfield Clinic in central Wisconsin.

“For some people, (money) is a huge motivator,” she said. “But that doesn’t work for everyone.”

With the Affordable Care Act enrollment now underway, Wisconsin’s anti-smoking advocates are concerned that higher health insurance premiums for smokers will convince many tobacco users that they can’t afford to sign up for insurance through the online federal exchange. The result could mean those same people who need access to health insurance most won’t get it.

People who use Medicaid for health care coverage or those who are uninsured smoke at higher rates than the rest of the population, and both groups are expected to use the federal exchange to shop for insurance coverage.

The American Lung Association estimates that nationwide 31 percent of people without insurance and 33 percent of Medicaid enrollees smoked cigarettes in 2011. About 21 percent of the general population smoked that year, according to the most recent data available.

In Wisconsin, about 19.5 percent of the adult population smoked on a regular basis, according to a 2010 report produced by the University of Wisconsin Carbone Cancer Center.

Smoker care costs

Smokers typically require more medical treatment than nonsmokers. In a 2012 study by the Mayo Clinic in Rochester, Minn.,annual health care costs for smokers are $1,275 higher than for nonsmokers.

According to the non-partisan Kaiser Family Foundation’s calculator, someone who is a nonsmoker making $30,000 would pay a premium of $2,535 per year for a silver plan under Obamacare. A tax credit of $24 would make the final premium $2,512 per year.

Being a smoker could add $1,268 in this scenario, for a total of about $3,780.

The silver lining in buying one of those plans gives smokers and tobacco users access to cessation treatments, which must be covered by exchange insurance options under the new law, commonly called Obamacare. Premiums could drop if tobacco users can manage to kick the habit, but it’s too early to know how smokers will react to the changes, advocates said.

Michael Mark, founder of the American Lung Association’s QuitLine, described the health care law implementation process as “like flying an airplane while it’s being built.”

“All the things we think could happen — including the good ones (such as) more people calling us, getting more people to quit, removing tobacco consumption as the number one habit Americans can do to improve their health care — are hopes,” said Mark, a nurse and respiratory therapist in Illinois.

Carrot and stick

The Affordable Care Act sets up a “carrots and stick” scenario for smokers, said Michael Fiore, founder and director of the Center for Tobacco Research and Intervention at the UW School of Medicine and Public Health.

“The carrots are that if you’re a smoker, you will get coverage for evidence-based counseling and medicine,” Fiore said. “The stick is that insurers can charge you more if you continue to smoke.”

Insurers argue that the stick is essential because the Affordable Care Act requires coverage of everyone, regardless of tobacco use or pre-existing health conditions.

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Because of higher costs for smokers, insurers and employers have made encouraging people to quit a priority. Bruce Van Cleave, chief medical officer at Aurora Health Care, said the health care provider’s campuses in Wisconsin have been smoke-free for years.

The percentage of employees who smoke dropped from about 14 percent to 7 percent during the past three years, he said.

Van Cleave is sympathetic to people who will find the smoking surcharges on premiums expensive but says smoking or tobacco use creates equally expensive health risks that don’t exist in nonsmoking patients.

“It’s a difficult choice, and certainly people could say, ‘You’ve priced me out of the market,’” Van Cleave said.

The law penalizes people who don’t buy insurance, with a $95 fee in 2014 and increasing amounts in future years.

Vanderboom, the nurse specialist in Marshfield, said she hopes the surcharges for smokers won’t push people away from purchasing insurance. She worries that without access to medication or a doctor’s advice, smokers will continue the habit and face serious health problems down the line.